Using Data Analytics to Grow Online Revenue and Reduce Fraud Effective Business Intelligence

If you have the humility to listen to what the data is really telling you, rather than look for data to support your assumptions, you will find opportunities that you wouldn’t have expected. Simon Protheroe, Square Enix Case Study / Using Data Analytics to Grow Online Revenue and Reduce Fraud Effective Business Intelligence With well-known franchises such as Final Fantasy, Lara Croft, Hitman and Deus Ex, Square Enix is one of the world’s largest video game companies. As it adapts to changes in its industry, it found that the large volumes of data it generates presents both challenges and big opportunities. To analyze its payments data, the company turned to Elevate, the business intelligence solution from Ingenico ePayments, with impressive results… 1 INTRODUCTION A big transition has taken place in the gaming industry over business model, making a relatively small number of very the last few years, forcing game developers and publishers large deals - selling tens of thousands of boxed copies such as Square Enix to review and adapt their business into a small number of retail partners - the company model. Historically a Business-to-Business company, Square increasingly sells directly to millions of gamers around Enix would sell large volumes of boxed games into a the world through digital distribution and small, in- network of channel partners such as electronics stores, toy game purchases. This new model means the company stores and specialty gaming retailers. The moment a game now generates enormous amounts of live data about was sold and shipped out of its warehouse, the company the performance of its games, from in-game behavior to no longer had much visibility or detailed analytics about its purchasing habits. These live analytics allow the company performance beyond retail sales reports. to iterate games in days or weeks rather than months or years, and make tweaks to things like pricing and offers These days, Square Enix sees high growth coming from almost in real time. online and mobile games. In contrast to its traditional CHALLENGE Some of Square Enix’ key games have successfully made Enix. “Making sure you’re asking the right questions, and the transition from boxed product to multiplayer online understanding what the data is really telling you. When game. Instead of selling a game once, the company now you do this, you will find things that you wouldn’t have makes the games available to play for free, and makes expected.” money selling virtual credits that players can use within the games. These direct interactions with players produce While Square Enix monitors player behavior in a number of enormous amounts of data about their behavior and ways to improve the overall user experience for its games, preferences that the company can use to steer and improve one of the most important performance indicators on which performance. But how to organize this raw data in such the company measures success is the number of players a way that it allows for analysis and interpretation? And that eventually engage enough with the game to convert how to avoid the trap of confirmation bias, or looking only to paying customers. The company wanted to improve its for data that supports a preferred conclusion? understanding of the payment funnel, including the various bottlenecks that inhibit casual players from becoming “One of the biggest challenges in the switch from retail to highly engaged and paying gamers, and identifying online games, with much more data coming in, is to have opportunities to optimize conversion. To do so, Square the humility to listen to what the data is telling you,” said Enix turned to its Payment Service Provider, Ingenico Simon Protheroe, Online Development Director at Square ePayments, for advice. 2 SOLUTION Ingenico ePayments provides Square Enix with the market for this game in terms of total number of players, technology and services that enable the company to accept but ranks only 49th in terms of number of paid players. The online payments from all over the world, using a wide game was localized and priced appropriately, so we should variety of locally preferred payment methods. have been able to predict the conversion rate. Elevate To help clients do more with the data that these payments allowed us to analyze the different steps in the payment generate, the company developed Elevate Data Services, funnel, determine what was holding back the conversion a comprehensive Business Intelligence solution designed ratio and make the necessary adjustments to drive up the specifically to analyze online payments and chargeback conversion ratio.” data. Elevate organizes unstructured payment data into visual dashboards that let merchants interact with the data Because Ingenico ePayments processes payments for in order to find exactly those insights that will help them thousands of merchants all over the world, including many to make the decisions that accelerate the growth of their of the world’s leading video game companies, Elevate has business. access to one of the largest sets of aggregated payment data in the world. This allows a Square Enix to also analyze For Square Enix, Elevate provides full visibility into the its own performance, but to benchmark it against industry payment funnel and lets the company find and adjust averages, and the top performers in its own industry. the payment experience for its users based on observed For Square Enix, this turned out to have really powerful trends. applications as well. “Recently, we had a game that was performing poorly in “One key advantage Elevate gives us is a view of other some countries in terms of conversion and not in others, companies’ data. It allows us to benchmark our aggregate but we couldn’t figure out why! This is where Elevate really data against others, and that’s where the real value is. For helped us,” said Protheroe. “Based on our analytics, we instance, Elevate shows us what payment methods we are know exactly which countries the people that play our missing per country and the opportunity they represent.” games are from. Russia, for instance, is the fifth largest said Protheroe. “The Netherlands is an important market for us, but when we benchmarked our performance in the Netherlands against that of our peers, we noticed that we were missing a massive opportunity for growth. Elevate showed us that up to 60% of the aggregated gaming revenue in the Netherlands, generated by our competitors, came from iDEAL! Elevate showed us that we were leaving potential revenue on the table by not offering iDEAL as a Elevate gives us clear, payment option for our Dutch customers. Elevate gives actionable business us clear, actionable business intelligence on which to base intelligence on which to decisions, rather than conjecture and general ‘old wives tales’”. base decisions, rather than conjecture and general ‘old wives tales’ Simon Protheroe, Square Enix 3 ELEVate Data SERVICES Elevate organizes and visualizes performance insights Consumer Drop-Off Rate, Refund Rate Over Time, and across 8 key performance areas and 39 individual Dispute Revenue and Opportunities. reveal insights such dashboards. These dashboards reveal the types of insights as ‘Which chargebacks should I challenge?’, ‘At what step that let merchants such as Square Enix quickly and easily in the payment process are transactions most likely to fail?’ identify trends and patterns, opportunities for optimization, and ‘What are the key trends in the refund behavior of my and issues that need immediate attention. New dashboards customers, by country and payment product?’ focus on performance indicators such as Payment Funnel/ KEY BENEFITS 4 Key Take Aways from Simon Protheroe, Online Development Director at Square Enix: • Getting really strong data from as much of your funneling process is key • Be very dilligent in understanding that data and make sure you’re answering the right questions • Use tools like Elevate to help you benchmark and to enable you to understand how you’re performing relative to your • industry, rather than just in absolute terms • When you have that data, don’t limit your thinking about what you can do with it. Business Intelligence isn’t just about growing revenue, it is also about lowering cost and exposure to risk. Curious about how we can go further together? Visit www.ingenico.com/epayments 4.

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